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Business Efficiency Drives Tech Investments for Restaurants

The National Restaurant Association has predicted that the $683.4 billion restaurant industry is projected to grow by 3.6% in 2014. Similarly, according to HT’s 2014 Restaurant Technology Study, increases are predicted across all measured business metrics — gross revenue, average guest check, guest counts, same store sales, and net profitability companywide.

This positive progression is leading to more willingness from operators to invest in technology and results from the 2014 study confirm that investments in technology are increasing, and will continue to rise for the next several years. This aligns with Gartner’s forecast that IT spending across all industries, worldwide, will grow by 3.1% in 2014. With technology budgets on the rise, it’s predicted that by 2016, the number of restaurants allocating ten percent or more of overall revenue to IT will grow from 11% (in 2014) to 16%.

Despite enthusiasm for customer-facing technology, such as loyalty and guest services, technology investments are still primarily motivated by business efficiency and employee productivity. Many back-of-house applications have become mainstream, and future implementations focus on making BOH systems accessible on a mobile device, another investment that aims to streamline workflow and appeal to the mobile millennial culture.

According to the HT study, “business efficiency” was the main driver of IT projects in 2014, with 68% of respondents selecting this option. The second was “employee productivity,” with 59%. As an investment motivator, “customer engagement / loyalty” ranked third (47%) and “enhancing guest services” came in fifth (33%).

These responses affirm that technology in the restaurant industry is still foremost implemented for its ability to improve core operational processes, rather than the guest experience. Mobile solutions are creating efficiencies that will impact both the customer experience and operations. The restaurant industry has largely focused its IT in areas where business efficiency can be easily obtained and measured (such as replacing cash registers with POS, adding the ability to accept credit cards, and implementing accounting and time management solutions).

Many restaurants have already begun to embrace these technologies and are now looking to the next wave of tech offerings to improve business such as mobile wallets and integrating social CRM programs. The challenge for restaurants’ technology teams will be to change the long-established tradition that sees IT as an operational tool rather than a service tool.


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